DECEMBER 19, 2003

GPWC-SLEC issues new release

Formula One Administration, GPWC and SLEC have announced that they have agreed a memorandum of understanding on the future structure of the Formula One group of companies, the commercial rights holder of the FIA Formula 1 World Championship. According to the carefully-worded release the new structure will include increased team revenues, representation for the GPWC on the SLEC board of directors although the shareholdings are not going to change significantly with the Bayerische Landesbank, JP Morgan and Lehman Brothers continuing to own a majority of the SLEC shares. Bernie Eccelstone will continue to run the company and the signatories have committed themselves to an initial public offering for the company in the medium term. The statement says that an extension of the Concorde Agreement is part of the overall solution.

This is all well and good but there are elements of the problem which cannot be solved overnight: the extension of the Concorde Agreement will, for example, need to involve the FIA and it is thought unlikely that any of the deals will involve Allsport Management, which takes a big share of the current revenues generated by F1.

The statement is, however, a piece of good news for the car manufacturers who had insisted that there be a settlement by the end of the year. This may not be a settlement but it is at least an indication that one can happen.

What is perhaps most interesting is that the release sent out was not sent on the usual letterhead with the car manufacturers all listed and the release refers to "GPWC shareholders representing BMW, DaimlerChrysler, Ferrari, Ford and Renault" rather than the companies themselves. The impression is that the car manufacturers may not be involved directly and may be trying to do deals via other vehicles, perhaps offshore, which rather undermines the grand claims that the GPWC has always made about there being total tarnsparency in their dealings.

"This memorandum of understanding incorporates GPWC's core objectives and is in the very best interests of the teams and the fans," said Jurgen Hubbert of the GPWC.